Adoption of International Financial Reporting Standards

Melbourne, 29 July 2005

Foster's Group Limited (Foster's) is required to adopt the Australian equivalents to International Financial Reporting Standards (AIFRS) commencing 1 July 2005. The Group's first fully AIFRS compliant financial statements will be presented for the year ending 30 June 2006, with interim accounts for the period ending 31 December 2005. Comparative information will be required to be restated in both sets of accounts. The majority of the adjustments required on transition to AIFRS will be made against opening retained earnings at 1 July 2004.

 

 Foster's has evaluated the AIFRS standards and identified a number of key differences to those previously applied by the Group under Australian GAAP (AGAAP). This document explains the key changes in accounting policies expected for the Group and provides estimates of the adjustments required on transition to AIFRS and the expected ongoing impact of the changes to the income statement.

Key points:

•  Application of AIFRS does not change Foster's business strategy, cash flows, or ability to continue to pay dividends;

 

• Foster's estimates a $1.2 billion reduction to net assets on transition to AIFRS at 1 July 2004. This reduction is due mainly to de-recognition of internally generated intangible assets (brand names and mailing lists) and deferred tax adjustments;

 

• Restated net profit under AIFRS for the half year ended 31 December 2004 is $26 million higher than the $757 million the Group previously reported under AGAAP. This increase is due mainly to the elimination of goodwill amortisation under AIFRS;

 

• Foster's acquired Southcorp Limited in May 2005. While Southcorp had previously identified three key areas of AIFRS impact (tax, share-based payments and financial instruments) these will not impact Foster's 1 July 2004 transitional adjustments or F05 half year AIFRS results

 

While the Group has made reliable estimates of the major financial impacts expected on transition to AIFRS, continuing developments in and interpretation of accounting standards may result in changes to these estimates before they are presented as comparative data to the financial information reported in fiscal 06. The transitional financial impacts noted in this announcement are unaudited. Specific work continues to progress in the area of tax.

 

Further information:

Media
Lisa Keenan
Director - External Communications
Tel: +61 3 9633 2265
Mob: 0409 150 771

Investors
Chris Knorr
Vice President - Investor Relations
Tel: +61 3 9633 2685
Mob: 0417 033 623

 FGL Investment Market- Pete Scott Presentation (audio) (MP3, 3.8 Mb)

 Adoption of International Financial Reporting Standards - Overview and Slides (PDF, 1.8 Mb)